Cash costs year-on-year increased by around $20 a tonne to more than $100 a tonne over the financial year as a result of rising fuel prices, unseasonable wet weather, contractor performance and approvals delays added significantly to costs.

“Average prices increased from $116 to $143 per tonne, and the production volume is up by about 5 per cent. But that was offset slightly by a lower yield and also higher mining costs, particularly out of the Duralie area," Mr McPherson said.

The company is aiming to ramp up production at its Duralie mine, roughly 75 kilometres from Newcastle, to 3 million tonnes per annum by 2014.

Mr McPherson said cash costs are expected to be on average around $100 per tonne for both the Gloucester Basin and Donaldson operations, subject to external impacts including wet weather.

The company’s operational profit was pared back by higher transaction costs as a result of the MIddlemount joint venture project in Queensland.

After transaction costs of $6.4 million after tax, the company had operational profit after tax of $61 million, representing profit of $29 a tonne of coal sold.